The Administrative Simplification section of the Health Insurance Portability and Accountability Act (HIPAA) 1996 provides standards for the exchange of information via electronic transactions between health care providers and third-parties involved in the financial settlement of health care claims. The reduction in the administrative costs for processing health care claims has not been realized to the extent Congress intended. The reasons for continued high administrative costs in spite of the standardization of the format and content of the information exchanged are many. The reasons include incomplete integration of information. Legacy provider and payer information systems are limited in their ability to process EDI (Electronic Data Interchange) standard compatible transactions automatically. Data integration is likely to be implemented as hospitals, physicians and health care payers upgrade or replace their legacy information systems. The replacement cycle for such systems is a long one, but newer systems are available that improve interoperability and integration of data exchanged by heterogeneous systems.
Another reason administrative costs have failed to decline is that the anticipated increase in productivity and the resulting decrease in labor costs have been slow to materialize. This is due, in part, to the complexity of the health care payment system, which continues to require human involvement in the medical claims adjudication process. Most hospitals currently use a manual process to enter eligibility response information into their information systems. A manual process is time consuming and prone to keying errors. Some hospitals have attempted to automate insurance eligibility response information data entry via scripting tools. However, the variability of insurance related information received from payer organizations makes comprehensive automation difficult. Hospitals assign different reimbursement plan codes based on information returned by a payer organization, such as a managed care provider name. This data may not be codified and not standardized. This makes text-based comparison difficult. Additionally, exception situations are common and often require human intervention. In some situations, users may need to contact a managed care provider to discuss information returned in a response message. This type of situation makes complete automation difficult. A system according to invention principles addresses these deficiencies and related problems.